Pag-IBIG FundCorporate HeadquartersPetron MegaPlaza Bldg.,

358 Sen. Gil Puyat Ave., Makati City

Circular No. 339

TO: ALL CONCERNED

SUBJECT: GUIDELINES IMPLEMENTING THE COLLECTION OF PROVIDENTOBLIGATIONS OF DELINQUENT AND UNREGISTEREDEMPLOYERS

Pursuant to the approval of the Pag-IBIG Fund Board of Trustees in its 296th BoardMeeting held last 24 July 2013, the Guidelines Implementing the Collection ofProvident Obligations of Delinquent and Unregistered Employers are herebyissued:

I. OBJECTIVES

The program aims to:

1. Promote and protect the interest of existing and potential members;

2. Compel unregistered employers to register with the Fund;

3. Compel employers to settle their provident obligations with the Fund;

4. Compel said employers to deduct the provident obligation of their employees andremit the same to the Fund, together with the employer counterpart; and

5. Augment the Fund's capacity in conducting collection activities among delinquent andunregistered employers, including deprived dividends, and penalties in a most cost-effective manner.

II. COVERAGE

This program shall cover collection of provident obligations consisting of unremittedmonthly mandatory savings, deprived dividends, interest and penalties, from delinquentand unregistered employers. It shall also cover applications or requests for penaltydiscount received from employers beginning July 24, 2013.

III. DEFINITION OF TERMS

For the purpose of implementing this program, the following terms shall be defined asfollows:

1. Accountls or Endorsed Accountls shall refer to employers endorsed to thecollection agency for collection activities.

2. Agreement refers to the Memorandum of Agreement between the Pag-IBIG Fundand the Collection Agency.

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3. Collection Agency refers to an accredited entity that shall assist Pag-IBIG Fund inconducting activities to collect the provident obligations of delinquent andunregistered employers.

4. Deprived Dividends refer to the foregone dividend earnings of the monthlymandatory savings of the employees with the Fund due to non-remittance of thedelinquent employers and unregistered employers.

5. Provident Obligation refers to the employer's total unpaid monthly mandatorysavings, deprived dividends, and penalties.

6. Employer or Employers shall refer to delinquent and unregistered employers.

7. Delinquent Employers are registered employers that failed to remit at least three (3)months of the required Pag-IBIG monthly mandatory savings under the mandatorycoverage.

8. Unregistered Employers refer to those employers whose business operations aresupposed to be mandatorily covered by Pag-IBIG Fund but failed to register with theFund.

IV. OUTSOURCING OF COLLECTION ACTIVITIES

A. Accreditation of Collection Agencies

The Fund shall accredit and engage the services of reputable collection agencieswith sufficient experience, professional expertise, facilities, and logistical capacity toundertake collection activities among delinquent and unregistered employers.

1. Assessment for Accreditation

Collection agencies who shall apply for accreditation shall be evaluated based onparameters as may be determined by the Pag-IBIG Fund which shall include butnot limited to the following:

1.1 Competency to provide quality collection services to Pag-IBIG Fund;

1.2 Stature in the industry;

1.3 Compliance with Pag-IBIG Fund requirements; and

1.4 Compliance with the appropriate regulating agencies in the Philippines.

The applicant shall be rated using a non-discretionary Pass or Fail Rating oneach of the criterion mentioned above. Please refer to the sample PostQualification-Accreditation of Collection Agency attached hereto as Annex A.

2. Approval and Validity of Accreditation

2.1 Collection agencies shall be approved for accreditation by the ChiefExecutive Officer subject to the reccrnmendation of the AccreditationCommittee. I

2.2 The collection agencies' accreditation shall be valid for two (2) years tocommence upon its signing by the parties.

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2.3 The collection agencies' accreditation shall be subject to renewal providedthat:

2.3.1 It has passed the Post Qualification - Accreditation of CollectionAgency Criteria;

2.3.2 It has a good standing as a collection agency for the past two (2)years; and

2.3.3 It does not violate any of the terms and conditions of the agreement.

3. Grounds for Revocation of the Accreditation

The collection agencies' accreditation shall be revoked under the followingcircumstances:

3.1 It has committed a breach of any of the terms or conditions of its Agreementwith the Fund;

3.2 It is guilty of misconduct or neglect in the discharge of its duties as providedin the Agreement;

3.3 It acted in a manner that could reflect adversely on Pag-IBIG Fund;

3.4 It did not perform as required and did not meet its targets;

3.5 It is placed under receivership, management or trust, or execution is leviedagainst, the whole or any of its undertaking or assets, or if any petition ororder is made or resolution passed for winding up or if it becomes subject toany event analogous thereto;

3.6 The collection agency or any of its officers, employees, or personnel isinvolved in any form of fraud, which shall include forgery of signatures oncertificates or any other document, fabrication and tampering of documentsand database, intentionally misleading employers on account details,disclosing data to competition, acceptance of gifts and/or taking money fromemployers;

3.7 The collection agency or any of its officers, employees or personnel hascommitted acts prejudicial to the interest of Pag-IBIG Fund or has made anymisrepresentation to the employers or to any third party; or

3.8 Its license to operate or business permit is cancelled or revoked.

B. Scope of Services of the Accredited Collection Agencies

1. The accredited collection agencies shall undertake extra-judicial collection torecover provident obligations, such as but not limited to the following:

1.1 Specialized phone call campaign/ telecalling;

1.2 Skip tracing;

1.3 Address verification;

1.4 Field visits

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1.5 Issuance of notices - collection letters and correspondence as approved bythe Fund;

1.6 Negotiation - offering of payment plan and concessions subject to the Fund'sapproval;

1.7 Telephone Brigade;

1.8 Other means based on industry practice which are acceptable to Pag-IBIGFund and in accordance with the parameters of BSP Circular 454.

2. The collection agencies shall monitor compliance and submit periodic reports tothe Fund on all accounts endorsed. It shall include but not limited to the following:

2.1 It shall keep and maintain the account during the collection period of onehundred twenty (120) days counted from date of endorsement, except whensooner returned or when the account is covered by a plan of payment;

2.2 It shall return the account to Pag-IBIG Fund upon the lapse of 120 dayscollection period unless it is covered by a plan of payment;

2.3 It shall adopt a monthly collection target which shall be set by the Fund.

V. COLLECTION ACTIVITIES

A. Prior to Endorsement of Accounts to the Collection Agency

1. Pag-IBIG Fund shall issue a Final Demand Letter to the employers.

2. Employers shall be given a period of thirty (30) days from receipt of FinalDemand Letter to settle their provident obligation and to avail of the penaltydiscount and payment scheme. The Fund shall accept applications for penaltydiscount and receive payment of penalty obligation within the said period.

3. Payment of Provident Obligation

The employer shall pay the provident obligation in two (2) stages: first, bymaking an initial payment, and second, by paying the balance within a periodas may be allowed by the Fund.

The total assessed penalties (TAP) shall be the penalties computed as ofpayment date of provident obliqation.

Further, discounts shall be granted, but only on the penalties and subject tothe following conditions:

3.1 Required Initial Payment

As initial payment, the employer shall pay in full the total unremittedmonthly mandatory savings, deprived dividends, and a minimum of 40% ofthe TAP as of payment date.

3.2. Discount on TAP

3.2.1. Discount on the TAP shall be applied after the initial payment. Tobe eligible, the employer must meet the following:

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3.2.1.1. It must pay and settle at least the required initial paymentin Item V-A, Section 3.1 of these guidelines to Pag-IBIGFund within thirty (30) days from receipt of the FinalDemand Letter issued by the Fund's operating unitconcerned.

3.2.1.2. It must not have collected the mandatory savings from itsemployees but failed to remit the same.

3.2.1.3. If the employer has previously availed of a penaltycondonation, it must have fully complied with the terms ofsaid condonation.

3.2.2. Discount on TAP shall be based on the percentage of cashpayment on the TAP and shall be in accordance with the scheduleprovided in the table below:

% of Paid Penalty to TAP Discount Rate On TAP

60% 40%50% - <60% 20%40% - <50% 10%

3.3. Payment Scheme for the Balance of the TAP

The balance of the penalty (i.e., less the initial payment and the discount)shall be paid in the following manner:

3.3.1.lf the balance is less than P25,OOO.00,by full payment within seven(7) days from the date of approval of the discount.

3.3.2.lf the balance is at least P25,000.00, by installment within amaximum period of twelve (12) months from the date of approval ofthe discount. The first installment shall be due on the so" day fromthe date of approval and the succeeding due dates every so" daythereafter.

3.3.3. The employer shall be required to issue post-dated checks to coverthe 12-month installment in Item V-A, Section 3.3.2.

3.3.4. Should the employer fail to pay any installment as it falls due, theportion of the penalty deducted from the TAP shall be re-imposed.

4. Immediately after the 30-day period, Pag-IBIG Fund shall issue a Notice toEmployer that its account will be endorsed to the collection agency withinfifteen (15) days.

B. After Endorsement of Accounts to the Collection Agency

1. Within 15 days after the 3D-day period, Pag-IBIG Fund shall submit the listof employers with unsettled accounts to the collection agency.

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2. Eligibility requirements for discounts under Item V-A, Section 3.2.1 shall alsobe applied to the accounts endorsed to the collection agency.

3. Pag -IBIG Fund shall require employers to settle their provident obligationswith the Fund strictly in accordance with Item V-A, Section 3 of theseguidelines.

VI. OTHER PROVISIONS

1. The collection agency shall not receive any payment from the employer.

2. Collection efforts on the endorsed accounts shall be for a period of one hundredtwenty (120) days. An extension period may be granted as may be mutuallyagreed between the parties. Should no collection be made within the prescribedperiod or extension thereof, as the case may be, the collection agency shall returnsaid accounts and shall submit its final report to the Fund.

If the employer still fails to settle its provident obligation despite collection effortsmentioned in the preceding paragraph, it shall be endorsed to the Legal andGeneral Counsel Group for appropriate action.

3. The employer shall be required to remit the monthly mandatory savingssimultaneous to the payment of provident obligations. Failure to remit the same,the employer shall be charged a penalty of 1/10 of 1% of the amount due per dayof delay, which is equivalent to three percent (3%) per month penalty in Section 23(b) of Republic Act 9679 and Section 3(b), Rule VII of its Implementing Rules andRegulations.

VII. ESCALATION CLAUSE

Any issue that may arise in the interpretation and implementation of these guidelinesshall be resolved by the Department Manager III or escalated to the next higher levelof authority.

VIII. AMENDMENTS

These guidelines may be amended, revised or modified by the Pag-IBIG Fund SeniorManagement Committee in furtherance of the objectives of the program, providedthat the amendments, revisions or modifications herein adopted are consistent withthe mandate of the Fund under its charter and existing laws.

IX. EFFECTIVITY

These guidelines take effect immediately.

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ATTY. DARLENE MARIE B. BERBERABEChief Executive Officer

. ~.~"katiCity~rch; 27 l' 2014

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ANNEXA

POST QUALIFICATION - ACCREDITATION OFCOLLECTION AGENCY

COLLECTIONAGENCY: ---------------------------------------------------------------------------------------ADDRESS: ~---------------

CRITERIA PASS FAIL

Must be in collection business for at least five (5) years

Must have an accreditation for at least three (3) companies in any of the followingbusiness sectors;

a. Banking (Universal/Commercial)b. Credit Card Companiesc. Telecommunication Companies

Must present Audited Financial Statements, stamped and received by the Bureau ofInternal Revenue, showing profitable operations for the past three (3) years;

Must be duly registered with the Securities and Exchange Commission (SEC) or theBureau of Domestic Trade (BOT) or of a government regulatory body;

Must have a valid Certificate of Registration issued by DOLE under Department Order No.18-02 series 2002 or 18-A series of 2012;

Must have the organizational structure and manpower complement to undertakecollection, with a highly trained, skilled and expert personnel in the field of collection, skiptracing, tele-collection, motorized field collection and negotiation;

Must have at least fifty (50) trained collectors;

Preferably a member of a Collection Agency Association;

Must be a registered employer with Pag-IBIG Fund with no delinquency and/or underremittance of Monthly Mandatory Savings and Loan Amortization.

Must have the physical facility, technology and resources to ensure information securityand be able to devote a work space exclusively for the processing of Pag-IBIG Fundaccounts.

Must be willing and able to put up a Security Fund in the amount Two Hundred ThousandPesos (Php 200,000.00) which amount be increased at any time during the term of theagreement as determined by Pag-IBIG Fund at its sole option and discretion.

Evaluated by:

Date: _

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